1.

What is the treatment of transaction costs related to bond investment carried at

amortized cost?
a. Expensed outright
b. Added as part of the investment
c. Ignored
d. Deducted from the investment
 
2. Which of the following is an investment property?
a. Property being constructed or developed on behalf of third parties.
b. Owner-occupied property awaiting disposal.
c. Property that is being constructed and developed as investment property.
d. Property held for future development and subsequent use as owner-occupied
property.
 
3. PAS 40 requires that investment property be accounted for using
a. Cost model or fair value model
b. Cost model or revaluation model
c. Cost, fair value or net realizable value model
d. Cost model or net realizable value model
 
4. Upon the death of an officer, an entity received the proceeds of a life policy held by
the entity on the officer. What amount of gain should be reported?
a. No gain is recognized on life insurance policies
b. Proceeds received less cash surrender value less adjustment for unexpired
insurance premium
c. Proceeds received plus cash surrender value
d. Proceeds received
 
5. In life insurance policies with cash surrender value, dividends received are treated in
accounting as
a. Miscellaneous Income
b. Deduction against life insurance expense
c. Addition to cash surrender value
d. Addition to life insurance expense
 
6. Which of the following is not an investment property?
a. Building to be leased out to subsidiary under operating lease (assuming parent
reports separately from its subsidiaries)
b. Machinery being leased out to third parties under operating lease
c. Land held for capital appreciation purposes
d. Land held for undetermined future use  
7. If an entity carries an investment property using the cost model, changes in the fair
market value of the investment property shall be
 a. Recorded every year-end
b. Ignored.
c. Recognized upon transfer of the property to property, plant and equipment
d. Recorded whenever available

8. If an entity carries an investment property using the fair value model, depreciation
charges shall be
a. Computed using straight line method only
b. Recorded at year-end
c. Ignored.
d. Recorded only when the investment property is disposed